Pathway to distinctive performance: M&A options for European insurers

• Published in: McKinsey Insights
• Main Authors: Dinis, Bruno, Flötotto, Max, Pinter, Zoltan, Mate Vida
• Format: Magazine Article
• Language: English
• Published: New York McKinsey & Company, Inc 16.03.2022
• Subjects: Acquisitions & mergers; Business interruption insurance; Costs; COVID-19; Insurance industry; Insurance policies; Interest rates; Pandemics; Private equity; Trends; Greece; United Kingdom > UK; Europe; Poland; Italy; France; Spain

[...]the insurance industry faces increasing pressure to adapt its business model to trends that predated and have been accelerated by the pandemic—such as the growth of digital behaviors, the expansion of ecosystems, and the provisioning of remote services, including telemedicine. Banks repositioning their insurance models.;Banks have been making changes to capture the full potential of their customer relationships in the bancassurance category by entering new alliances that improve their ability to provide a compelling suite of insurance products and to release capital to strengthen their balance sheet positions. According to our research, insurers implementing at least two small to midsize deals per year delivered 3.3 percentage points in excess total returns to shareholders in the decade before the pandemic (based on the M&A activity of the largest global companies, the Insurance Global 2000) (Exhibit 2). Insurers can structure programmatic deal strategies along five strategic actions to increase their odds of beating market performance and of future-proofing their business models: consolidating to unlock synergies, mostly with same-market players; divesting noncompetitive positions by exiting subscale or low-return positions; increasing access to growth by gaining weight in domains with tailwinds; developing cutting-edge capabilities by strengthening skills in innovative areas; and building ecosystem positions by expanding into adjacencies.